RALEIGH, N.C. (AP) - North Carolina’s insurance commissioner on Monday began deciding whether to allow homeowners’ coverage costs to rise by as much as 35 percent even as more insurers demand even higher rates in agreements with customers.

Craig Smith has seen the annual insurance premium for his rural Pitt County home double to $2,000 since he and his wife Brenda moved in 12 years ago, he said. For about half that time, insurance companies refused to cover his $365,000 home about 130 miles from the Atlantic coast unless he signed an agreement to pay a price they wanted that more than the regulated rate set by state Insurance Commissioner Wayne Goodwin.

“I went to several different companies. They won’t write a policy unless you sign a paper,” Smith said. “It was, ‘you sign this paper or we’ll cancel you.’”

Such policies increased last year to 30 percent of North Carolina’s $2.4 billion homeowners market, up from 23 percent in 2010, according to state Insurance Department data.

Smith spoke as Goodwin opened hearings expected to last four weeks on a rate increase that nearly 100 companies selling homeowners policies in the state requested in January. Goodwin’s decision on price increases averaging 25 percent statewide is not expected before late this year.

Goodwin’s staffers called the proposal excessive. A lawyer for the North Carolina Rate Bureau representing the companies, Mickey Spivey, said insurers are asking less than the 41 percent increase needed to cover obligations and costs while still making a fair profit. But insurance premiums must be high enough to be attractive for companies to take a risk by insuring homes and amass enough in reserves to pay claims when a big hurricane hits, he said.

Spivey reminded Goodwin about a change in state law five years ago that capped potential costs to insurers from a disastrous hurricane season by allowing a surcharge of up to 10 percent to be added to every property insurance policy statewide.

North Carolina homeowners saw a statewide average 7 percent increase a year ago, but companies said they needed more to meet their projections for future claims.

North Carolina’s average premium for a homeowners policy was lower in 2011 than the national average, though state comparisons are difficult because of wide variations in hazards, economic conditions and real estate values, according to the most recent comparison released in December by the National Association of Insurance Commissioners. However the rate at which North Carolina premiums increased was higher than the national average in 2011 and 2010, the report said.

Homeowners in 18 of the state’s rural, inland counties including Franklin, Johnston, Nash, Anson, Montgomery, Lenoir, Wilson and Richmond counties also could see rates jump by up to 35 percent. Homeowners in the cities of Durham and Raleigh would see premiums rise by up to 25 percent, Greensboro and Winston-Salem residents by 21 percent, and Charlotte homeowners by 15 percent, according to plans updated last week.

The rate Goodwin approves will also affect people like Smith, since a consent-to-rate agreement can’t exceed 250 percent of the rate determined, agency spokeswoman Kerry Hall said.